Maybe can this article work for you. http://nl.mathworks.com/company/newsletters/articles/image-overlay-using-transparency.html.
rgb = imread('peppers.png');
imshow(rgb);
I = rgb2gray(rgb);
hold on
% Save the handle for later use
h = imshow(I);
hold off
[M,N]=size(I);
%Create matrix for transparency
alpha=zeros(M,N);
%Matrix part with transparency
alpha(1:100,1:N)=0.5;
set(h, 'AlphaData', alpha);